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DIXON – While she was comptroller, Rita Crundwell transferred money out of the police and fire pension funds to pay city bills, the Dixon mayor said Thursday.

Two interim comptrollers hired following Crundwell’s arrest and subsequent firing discovered the financial irregularity after members of the pension board brought up concerns, Mayor Jim Burke said.

Crundwell is charged with one count of federal wire fraud in connection with what prosecutors say was the misappropriation of $53 million in city funds over the past two decades. She pleaded not guilty on May 7 and has a status hearing scheduled for June 15.

About $100,000 was transferred out of the pension fund, which is not supposed to be touched, and into the general fund from which bills are paid. The money was taken out during the past couple of years and later put back in, Burke said.

That means the amount of interest accumulated could have been affected, Burke said, but the numbers Crundwell gave Sauk Valley Media prior to her arrest probably are accurate. Crundwell said in January the police pension was 84.15 percent funded and the fire pension was 78.44 percent funded as of the last audit.

“We levy what [the actuaries] tell us to, according to what they’re projecting over the life of the pension,” Crundwell had said. “To be 100 percent, we would have to levy a lot more than they tell you.”

The state Department of Insurance is auditing the pension. It’s a standard procedure that perhaps moved up, Burke said, because of the Crundwell case.

Insurance department spokeswoman Kimberly Parker confirmed that an audit was ongoing but said she could not give a reason why it had been initiated.

Irregularities also were discovered concerning the city’s bonds, according to weekly reports put together by the interim comptrollers, Stan Helgerson and David Richardson. Reports for three weeks have been posted to the city’s website. Reports will be released to the public each week, Burke said.

Helgerson and Richardson spoke this week to a bond attorney about “what should be done, if anything, to notify bondholders of the financial irregularities the city has uncovered,” the report said. “Since all outstanding bonds were sold to a local bank and continue to be held by that local bank (Midland States), no additional disclosures are required.”

The Municipal Retirement Fund, which covers other city employees, was not affected, Burke said.